Joint ownership of family home: presumption of equality and equitable accounting

In Chen lily v Yip Tsun Wah Alvan ([2015] HKEC 2611, CFI) C and Y were unmarried co-habitees of the flat acquired by them as their family home with a view to marriage. Title was in joint names and it seems that this was a legal joint tenancy. The purchase was mainly financed through a mortgage over the property.

The couple split up and Y left the home. C alone bore all of the repayments of mortgage principal and interest from 2011 onwards. Y offered to  contribute half of the mortgage payments but C refused. Y suggested that the property be let out (C had married and no longer lived at the flat at the time of Y’s suggestion) but C refused this.

The court was asked to resolve the dispute as to the parties’ respective beneficial interests. Au-Yeung J. referred to Stack v Dowden and Jones v Kernott. In ordinary domestic cases where title is in joint names, there is a presumption of equality. The parties are unlikely to have intended that a balance sheet should be drawn up of their financial contributions ([17] – [21]). There were no unusual facts in this case to warrant a departure from the presumption of equality. Nor was there any evidence of a change of intention. Although Y left the home, the facts surrounding the departure did not suggest there had been a variation of the original common intention.

Y’s departure and offer to meet half of the mortgage payments amounted to an equitable severance of the joint tenancy. There should be an equitable accounting. After separation, C made all of the mortgage payments and her share of the proceeds of sale of the flat should be increased to include half of the repayments of principal made by her after separation. She was not entitled to compensation for the interest payments she had made; this was to reflect the fact that she had refused to rent out the flat at Y’s suggestion (indicating that she had sole possession of the flat). She should also be given credit for her outstanding credit card debts at the time of separation. These debts had been incurred to fund the couple’s joint living expenses.

Michael Lower

 

Advertisements

Tags: , ,

2 Responses to “Joint ownership of family home: presumption of equality and equitable accounting”

  1. Geoff Rowley Says:

    Could this be termed ‘ constructive severance’

    Thanks in advance,

    Geoff Rowley
    LLB student

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: